US producer prices slip 0.9 pct on cheaper oil

August wholesale prices dropped by a bigger-than-expected 0.9%, the sharpest retreat in almost two years, the government said on Friday as a big decline in energy costs eased price pressures.
The Labor Department's Producer Price Index, which measures prices at the farm and factory gate, slid by the steepest amount since October 2006 after notching a 1.2% gain in July. Analysts polled by Reuters were expecting a 0.5% decline.
Core prices, which strip out volatile food and energy costs, rose 0.2% as expected after a 0.7% surge in July that had fanned inflation fears. Energy goods prices tumbled 4.6% last month, the biggest drop since September 2006.
Despite the recent ebbing of energy prices, wholesale prices still rose 9.6% over the last 12 months, the Labor Department said. Core producer prices rose 3.6% over the last 12 months, the biggest year-over-year gain since May 1991.